Posted by: Andy Taylor | October 29, 2014

Proceedings Under Trust Code (Rather than Probate Code) Not Appealable Unless Final

In Bank of the Ozarks v. Cossey, 2014 Ark. App. 581, the Arkansas Court of Appeals addressed the question of whether an order that appears to be a non-final order is still appealable under Ark. R. App. P. (2)(a)(12), which permits an appeal from almost all orders entered in probate cases.

Only a brief summary of the facts of this case is necessary.  In sum, there was a dispute about who was the trustee of the Hamilton Family Trust.  One of the beneficiaries of the trust, Ms. Cossey, filed a petition claiming that Bank of the Ozarks was the trustee and demanding an accounting from Bank of the Ozarks.  Bank of the Ozarks claimed it was not the trustee of the trust.  The circuit court held that Bank of the Ozarks had acted as trustee, and ordered Bank of the Ozarks to perform an accounting within 30 days.  Bank of the Ozarks appealed from this order, along with a separate order awarding attorney’s fees and costs to Ms. Cossey.

On appeal, the Court of Appeals first addressed the question of whether the order requiring an accounting was a final order.  The court held that “[a]n order that contemplates further action by a party or the court is not a final, appealable order.” Because this order required Bank of the Ozarks to perform an accounting, and because there would likely be additional oversight and rulings by the circuit court, the Court of Appeals held that this was not a final order.

The Court of Appeals then turned its attention to Ark. R. App. P. (2)(a)(12) and Ark. Code Ann. § 28-1-116, which together permit appeals from almost all orders in probate cases.  In fact, the Court of Appeals held that “[w]e have interpreted section 28-1-116(a) to allow an immediate appeal from almost any probate order.”  However, the issue in this case related to who should be the trustee of the Hamilton Family Trust, a question governed by Ark. Code Ann. § 28-73-701.  The question, then, is whether this statute is part of the probate code.  Based on the notes to Ark. Code Ann. § 28-1-101, which lists the statutes that make up the probate code, the Arkansas Court of Appeals held that the statute applicable to this case (which was not included in the list) was not part of the Arkansas Probate Code.  The Court of Appeals also examined Ark. Code Ann. § 28-1-104, which lists the types of cases that are considered to be probate cases.  Although this statute was originally designed to set the jurisdictional guidelines when there were separate circuit, chancery, and probate courts, the Court of Appeals held that the statute is still applicable when determining appellate jurisdiction.  Because trust matters are not included in the list of matters considered to be probate matters, the Court of Appeals held that the issues in Bank of the Ozarks were not probate matters.

Having concluded that the trust dispute in Bank of the Ozarks was not a probate matter, a final order was required.  Because there was no final order, the Court of Appeals dismissed the appeal.  The Court did, however, give some guidance to the parties as to how to proceed.  The Court suggested in its opinion that a Rule 54(b) certificate (pursuant to which the parties may appeal from a non-final order) might allow the order to become appealable, although the Court of Appeals was very careful not to “comment[] on the propriety of a Rule 54(b) certificate . . .”  Nevertheless, it’s probably a safe bet that this case will soon be before the Court of Appeals again—this time with a Rule 54(b) certificate.


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